Use the Following Information for Questions
Red Grass Company

question 4

Multiple Choice

Use the following information for questions
Red Grass Company produces high definition television sets and uses total cost-plus pricing.The following information is available for this product:
$$\begin{array} { l l } \text { Fixed cost per unit } & \$ 100 \\\text { Variable cost per unit } & 300 \\\text { Total cost per unit } & 400 \\\text { Desired ROl per unit } & 140\end{array}$$
-The target selling price for this television is

• A)$240.
• B)$400.
• C)$440.
• D)$540.

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Definitions:

Illusory Correlations

The perception of a relationship between two variables when none actually exists.

Memory Biases

The tendency for memory to be distorted by previous experiences, desires, or the current emotional state.

Representativeness Heuristic

A belief that outcomes will always reflect characteristics of the process that generated them (e.g., an expectation that the outcome of a series of coin flips will always look random).

Coin Flips

A random process used to generate two equally likely outcomes, typically representing "heads" or "tails."